Consumer not liable after three years

Consumers have a choice in ­repaying small retail debts that are more than three years old if they didn’t acknowledge or partly pay them during that period.

The Prescription Act makes ­consumers exempt from paying such debts after the three-year period.

But it is not illegal for debt collectors to try and recover the outstanding moneys.

The onus is on the debtor to raise ­prescription as a defence.

Some debt collectors buy debt from credit providers and threaten defaulters with legal ­action long after the three-year ­period has lapsed.

Reana Steyn of the Credit Ombud says debts ­prescribe ­only when consumers do not ­acknowledge them or make any payments during that time.

“If a payment is made, then the prescription is interrupted. It will start running again after the consumer starts to default again,” says Steyn.

A number of consumers have complained about harassment at the hands of debt collectors ­after serving judgment for a ­specific debt.

One reader admitted she ­defaulted on her account with a clothing store eight years ago.

After failing to settle the ­account, her name was listed with the credit bureau.

Early last year, she received a call from different debt demanding payment of the debt.

When she checked her credit profile, it reflected that the blacklisting had been lifted and she has since been evading calls from the debt collectors, arguing that the debt had prescribed.

Steyn says that a judgment granted by a court of law does not prescribe for 30 years, as ­opposed to ordinary debt which could prescribe after three years.

She says consumers should ensure that any summons is served on them directly and not at an old address.

Credit Salvage, a law firm that helps consumers with lifting negative blacklisting, says a ­rescission of judgment is not a complicated process to ­understand.

The lawyers say a judgment can be easily removed when the other party consents in writing.

“Alternatively, a consumer will have to prove that at the time the judgment was entered they were not in wilful default,” the firm says.

According to Credit Salvage, in some courts a defaulter will have to bring a substantive ­application to obtain the ­rescission.

The attorneys charge R1?500 plus VAT for their ­services.

In other courts, a defaulter can approach the clerk for the rescission of judgment and take the document to the creditor to sign and return it to the court for the final process.

The Credit Ombud says it is important to record the ­discussion with debt collectors in ­writing, send a confirmation of address, and note the fact that they will raise prescription as proof of the discussion.

You also need to check credit bureau reports to see if they were perhaps incorrectly listed for a possible prescribed debt.

You can contact the Credit Ombud if you are not happy with the outcome.

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